Which Economic and Development Policy’s should Africa pursue to ensure its survival path?
By Dr. Mehenou Amouzou
Africa has a very serious economic identity problem. When compared to Asia, the continent has made much less progress. China, India, Indonesia and Singapore largely only endured tourism for revenue in the 1960s. Today, they are very technologically advanced and their banks and financial structure is more solid than the US and European banks. Elsewhere the world’s economic basis is on the brink of imploding and subsequent failure. Malaysia, which targeted and emulated that of West Africa in the 1960s, learned specifically the culture of the palm plantation and have polished, sustained and improved that industry. Today its general level of industrialization is a lesson that certain African countries should if not must learn. In 60s, 70s and 80s, the Western world (Europe and the United States) owned and or controlled 80% of the world's economic and financial power. This hegemony resulted in the intended diversion of wealth from developing countries. However, countries that were developing are now reversing the trend of superiority; economically it is now 55% for Westerners and 45% for others. It appears this rate will continue to evolve over the next 10 to 15 years per the World Bank. Possibly to the extent of 35% for Westerners and 65% for others.
Certain Countries once considered poor or developing in 60s, 70s and 80s are now today developing countries with a very promising and encouraging economic future. This is the case, for example, with China, India, Taiwan, South Africa, South Korea, Singapore, Russia, Malaysia etc. India could well become the global economic super power, surpassing the United States, Germany, Great Britain, France, etc. The world’s economic super power scenario could well reverse and sooner rather than later. Accordingly, will there be a place at the world’s economic table for the African Nations if their sovereign financial management is not corrected?.....possibly not.
The Africa nations, albeit continents rich in natural and human resources, have failed to redress the economic, technological and military issues. As mentioned in prior articles, while stressing the urgency of the situation, some African countries still continue to delegate their presidency after independence. African leaders continued to defend and protect the privileges and interests of the former colonial states, at the expense of national interests. These African leaders, without any vision for the future, are blocking the development of their countries which further creates economic and cultural chaos. More than fifty five (55) years after independence, the majority of African leaders still feel no shame about leading their countries into a position whereby they are unable to manufacture a simple bicycle. They are unable to reduce the import rate of certain simple commodities that can be found on a domestic basis and curiously they maintain to discuss their emergence as a developing nation. “smoke and mirrors maybe” The common sense minded countries that have heeded the warning and paid serious attention to financial awareness and that were once considered developing countries have since reversed the trend and are now major economic centers.
Therefore, where will Africa be in 10 to 15 years if the likes of electrification, access to water, education, health, roads, etc. are but a pipe dream for the poor and the vast majority of the population. These commodities are and will be considered a luxury reserved for a small fringe of the population that represents 0.025%. This issue is all the more so since this minority elite have solidified their position by a very active process of corruption and illegal activity which subsequently is leading to total disorder in the economic, social and political sectors. Easy gain and corruption have become the speeches that politicians advocate by extolling the political and economic illusion of emergence and growth. How long will Africa continue to serve as an economic, military, political or ethnical catchment area for all but its own citizens?
Can Africa emerge by keeping the same governance approach that has produced no results in the last 50 years?
The answer is "surely no". Why the state of development in francophone countries has not changed, why their future becomes increasingly dark and uncertain? This is a complex matter that requires the shedding of light on the path of emergence, the currency franc CFA, the health of Africans, Togo and Côte d'Ivoire.
The CFA currency
There have been books, articles and debates on this subject, all of which have concluded that money, the Franc CFA alone constitutes for 60 per cent of the financial destabilization and complete hampering of the development of the fourteen African countries and further in reverse creating benefit of the former colonial power of France via financial power. The remaining 40% of financial meltdown and other remaining causes emanates from the leaders of these countries themselves. Some years ago, no African leader was able to react to or support the denunciation of the expropriation of resources and capital by Jacques Chirac, the French Former President. Surprising? NOT!!. France has always enriched itself directly from its former colonies and would be far less developed but for these African countries specifically. The acts of a manna.
Why are the African presidents unable to provide for their people? Although the French government ransoms 60% of the direct or indirect resources and revenues of the former colonies, 40% remains in the hands of those heads of state that are not elected by the African people but designated by France. The latter thus ensures the payment of ransoms and benefits and in exchange, the leaders can afford everything: corruption, tribalism, nepotism, intimidation, arbitrary arrest, waste of resources, and so on. Rather surprising that France, the inventor that encourages and sponsors this whole system, is the same founder member of the human rights commission. “A rule for one and a rule for another”. Are human rights truly universal or it is really the right of interest, since the two are not reconcilable.
Having stable sovereign currency is very important but it would be prudent to assess the domestic resources of one’s countries. Following this, the first stage of development will be through the promotion of agriculture as it is very important to achieve food self-sufficiency and improve the image of the country. The second step involves processing of products on the spot and exporting these finished and complete. It is the industrialization of a country that will begin this way. It has nothing to do with building of a few industries to show that they exist in the public domain, however without any prior study to determine the real chances of sustainability and or potential success.
After the industrialization of the agricultural system, the people will no longer have to wait for food aid which can be very harmful to health because the majority of foods imported as aid to the underdeveloped countries are only non organic gma foods. Once the agricultural issue is addressed, only then will the creation of money come into play. This financial creation is completed in order to prevent the country from being economically, socially and then politically destabilized. Within Africa, the majority of the political opponents are no better than the incumbent leaders of the countries. They want, in turn, to become leaders by pledging allegiance to those same people who have control over the resources of the country. Adversely the people are taken hostage yet again. Modern slavery thus continues and the new slave masters are again African brothers.
Most recently, there was a meeting held by the governors of the Central Bank of Africa and the Western States (a summit), bringing together the Ministers of Economy and Finance of Francophone Africa. The meeting was chaired by the Governor of the French Bank and the Minister of the French Economy. At the conclusion of this summit, the same rhetoric: "The Franc CFA is good for you". The African leaders are lured into a false sense of security on the basis they should protect and coerce the French controlled currency.. It is like a mother who lulls her child by singing a lullaby. It should not be up to France to choose the currency of African countries. No leader of any African state likes to discuss the future of the franc CFA with the exception of the Chadian president. It is a subject that remains a taboo as they are afraid to find themselves on an ejectable armchair and no longer serving the propaganda machine of the West.
The health of Africans
The precarious situation in the field of health in Africa is alarming sad and inhuman. Many hospital patients lie on the floor and simply die from simple curable illnesses or stomach and sanitary bugs. This in association with drug shortage occurring very often. Do the health officials, Ministers really know the State of affairs within their respective country? It is suggested that yes they do know the current state of affairs but choose to ignore such at the risk of exposing themselves to such poor care and attention for outing the “system”. This is inhuman as they themselves do not hesitate to dip into State funds to go to health care as and when needed.
In Cameroon and Chad, health checks carried out by hospitals or clinics that are then sent to France take 30 days for the results to return to the Chadian hospital and 60 days for Cameroonian hospitals. Other countries do not even have these slight privileges. Either this process does not exist period, or the duration is longer. Even when a situation could be considered really urgent the diagnosis service may just not be available. Very often patients die before results arrive. Is sovereign and or cultural emergence really possible under these conditions? Cancer and other diseases that are considered a way of life in the western world and once considered western world diseases are now taking root in the black world because of some unconcerned leaders. Surely an issue of poor or non organic and natural nutrition. We are what we eat”. For the reasons stated above and inability to ensure health and food supply, these African countries are falling into the disgrace of assistantship. We talk about African emergence when these countries are even unable to do their own patient medical analysis. Due to misreporting by the heads of state and a veil of deceit it is virtually impossible to deduce the amount of actual assistance received in the form of aid for certain African nations whether food aid or medical reporting assistance. Cancers and other diseases that we associate with Western life today will be the decimation of African nations tomorrow and all of such is nothing but a huge conspiracy of gma food consumption that now enthralls the globe we live in. Emergence is not achieved by the snapping of one’s fingers but the initiation of a controlled set of positive developments that make it possible to change the status of a people from the bottom up.
Located in West Africa with an area of 56666 km² and a population of 7,500,000, this country is made up of hard working citizens hoping for nothing more than a better life for their children and even the cost of their own lives. During the 70s, Togo was considered the Switzerland of Africa thanks inter alia, to its Nanas Benz which mobilized the trade of loincloths throughout Africa. In 1990, the CNN television company in the United States made a report about these famous women and talked about their entrepreneurial dynamics. Yet they had not attended major universities such as Harvard, Yale, Sorbonne, Stamford, etc. The increase in the price of phosphate globally at that time had resulted in major investment works undertaken by the Togolese state to benefit from such, only 15% of which price inflation and subsequent investment was of economic interest to the country. 85% of these works are considered as negative investments, the benefits and falls of which were began to be seen when the fall of the phosphate court occurred. With these investments and the resulting interest, the country finds itself flat very quickly and subsequently enters a phase of voluntary recession. It could be argued that this result could be expected, however what was really lacking was the appropriate management of the state's resources.
The textile industry of Datcha (ITT) in Togo
According to geographer Yves MARGUERATH in 1961, the Togolese government asked a German industrial group to build a textile complex. The project involved decentralization, land use planning and industrialization. The investment was therefore made outside the capital. The Plateaux Region, the main cotton producing area of the country was chosen, albeit infrastructure and roads within the area were very poor and the main road linking Lomé to the north of the country was not even paved.
The textile industry of Datcha (ITT) was built in 1964, and began operating in 1966 with a further investment of 3 billion Franc CFA in 1975. The plant maintained sales figures of between 3 and 4 billion. Some of the products were exported to Europe while the rest circulated throughout West and Central Africa. The workforce of this plant reached 1,500 people with 30 managers, half of whom were German and the other Togolese. The factory was flourishing, it was a fine achievement that ran honorably between 70 to 80% of its production capacity.
According to the geographer of the ORSTOM Mr Yves MARGUERATH, the factory had to renew certain equipment and buy certain products. The company with 3 to 4 billion FCFA turnover was still unable to renew its work equipment and in 1980 ceased to be competitive. Debts accumulated up to 7 billion FCFA. The factory ceased trading accordingly. European executives withdrew at the end of 1980 and the dissolution of (ITT) SA was proclaimed in June 1981.
After the withdrawal and departure of partners, the factory still operated with its Togolese workers and cadres, without any legal status. The staff gave up little by little. In 1982, there were still 920 workers, 7 Togolese executives and a French technician (indispensable), who continued to run the factory, with enormous debts.
The fall of this industry is relative to a time when the regime was worshiping personality. In all the prefectures of the country, support movements were organized to dance, sing and praise. The government dressed dancers from head to toe. Togo then had a population of 3 million and had about 100,000 dancers who were no longer working for the most part and who were made available to praise the government falsely. The clothing of these 100,000 dancers, readers of support motions was the main reason for bankruptcy of the textile industry of Datcha (ITT) which however made a profitable turnover of 3 to 4 billion FCFA. How did it sink to a deficit of 7 billion FCFA? Unfortunately, this management system still continues and makes the future increasingly uncertain.
The Ivory Coast
It was the great francophone economy of West Africa that dazzled the other countries of the sub-region by its economic development and by its efficiency of health system which was above that of the other countries. The hospitals of the sub region recommended to their patients to go to seek treatment in Cote d'Ivoire. Today, Côte d'Ivoire cannot be spoken of with pride, serenity and hope without being a politician or "political puppet."
Côte d'Ivoire, like other countries, has made mistakes. Although these are serious, they could recover and correct them and hope for positive results in spite of some delays and economic fallbacks. The Ivorian government had detailed the ambitious program that would make the country the number one in Africa today. This program was meant to expand its development coupled with the dynamism of its efficient health system, job creation, and social cohesion etc. In 2015, the government declares a growth rate of 8% minimum per year and expects more in 2016. The National Development Plan 2012 to 2015 was extended from 2016 to 2020, equivalent to 45 billion Euros for the purpose "To accelerate the structural transformation of the Ivorian economy".
According to the weekly newspaper Jeune Afrique in May 2016, Côte d'Ivoire is on the way to emergence, rising investments and the control of inflation, budget deficit and debt, ... , “The country is making spectacular progress”. This progress benefits all. While Greater China loses its ratings the agency’s analyze, according to the weekly, "Côte d'Ivoire improves its position month by month in the eyes of these guardians of credit risk. Because almost all the signals are in the green. ". Côte d'Ivoire “appears” very happy in a world where growth is slowing down everywhere in Africa but there. The Ivorian government believes it has surpassed the 10% growth rate in 2015 when the IMF estimates it to 8.6% with 10.7% in 2012, 9.2% in 2013 and 8.5% in 2014.
The Ivorian government also mentioned in the newspaper Jeune Afrique that Fitch maintains the B rating in Côte d'Ivoire in addition to inflation curbed at an average rate of 1.2%, the current account deficit contained at 1 , 7% of GDP. The budget deficit is limited to less than 3% of GDP, which is better than that of France! Debt is controlled at 41% of GDP, when the average UEMOA is 74%. Investments have been multiplied by 3.2 since 2011. The minimum wage has increased by 64%. The salaries of civil servants are revalued by 12% in 2014, after twenty-seven years of stagnation. More than 2 million jobs have been created and per capita income has been improved by 20%. All aid paid to farmers (cocoa, coffee, cashew nuts, cassava ...) is on the rise. The president, Alassane OUATARA, is proud and insists: "We have halved poverty in four years. ".
If it has made this progress thanks to public investment, largely financed by foreign aid, it is said that Côte d'Ivoire intends to accelerate the pace until emergence through private enterprise succeeds. It is one of the top ten countries that have improved their business climate in the world, according to the World Bank's "Doing Business" ranking, according to the Center for Investment Promotion (Cepici), 40 companies are being born every day. The Ivorian rating agency Bloomfield Investment pointed out that debt service has risen sharply to the point of devouring 30% of the state's own resources; its vice-president and chief economist Youssouf CARIUS can only acknowledge that This will have little effect on the country's trajectory.
After presenting the beautiful programs that would make Côte d'Ivoire the pearl of Africa and make it very prosperous, let's compare them with the realities of the facts to hand. In economic, political and social terms, successive governments have made efforts to improve the situation of the Ivoirians, but the constant economic, social and political results do not make it possible to hope for the political, economic and social emergence that successive governments have advocated.
Reconciliation always seems to have stalled. Nothing is moving and the winners of the war fail to transform this victory to create social cohesion. The government thinks that imposing its diktat can force the adhesion of the people. The political cohesion that is part of the government is rather assimilated to the policy of follow-up. Those who fought the former government hoping for a better policy find themselves at an impasse. What has happened is that the majority cannot discuss with the minority the state of affairs within the country? It is now clear that the division born of the 2010 election continues to create problems that have economic and social consequences until this day. On October 5, 2016, the President of the country delivered a speech on a referendum on the constitution which was to be held at the end of October. This is a sensitive issue because the population is barely and poorly informed of the contents of this referendum which it is discussing when already it was time to vote. The first thing to do is reconciliation. From there, the points of view could be exchanged as with the reconciliation made in South Africa. Today, Côte d'Ivoire is divided. The word consensus seems void for this country.
On the economic plan:
Despite the efforts of successive governments, the recovery is not seen or felt. It looks like the economy is struggling to take off. Life has become very expensive and hard and the resourcefulness that existed has become an escape without help or cause. We see government statistics announcing the creation of millions of jobs. On the face of things, one can read on people’s faces despair, sadness, fear. If governments had actually created these millions of jobs, there would be a boost the economy but this is not the case. What is the actual and real number of unemployed? The government had announced a minimum growth rate of 10% in 2012. This would be a very good sign if these figures proved to be correct. According to the government, the minimum wage has grown by 64% and after 27 years of stagnation wages have been valued plus wise by 12% and in 2014 income by 20%. How have the government has managed to come up with figures that are different from the economic reality of the country. The growth rates that the government is announcing are based on the sale of raw materials, which explains why there was no economic impact as we should have seen.
On the social plan:
The social plan and cultural reconciliation appears to be reaching boiling point. Social peace seems precarious in the country and the real unemployment rate is very high, especially for young people under 25 years of age. The present is subject to social confrontations, the future very pessimistic and gloomy. Social dialogue, for its part, does not exist and one wonders whether the emergence advocated by the government is serious and real.
One could ask in which sectors or industries are the billions of funds as detailed in the National Development Plan (NDP) of 2012. Where were these sums invested? The government is planning another NDP from 2016 to 2020 with an amount of 45 billion Euros being vested. But if the former has not had a positive result, how can the people believe in the actions of the government? How can the people believe the second NDP when its billions of public funds that are rendering to repay the debts contracted by the Ivorian government? People are being forced to repay loans that they have not received. Emergence cannot be decreed.
Africa suffers from identity problems of its own. So long as Africans and its leaders continue to confuse their identities with that of a sovereign state that once colonized themselves, they are nothing but the same. The colonization was nothing but a paper exercise. The issue of emergence will only be utopia. Asia and India were able to take off, compete, surpass the West and take the place of first economic power based on their own identities, resources and cultural values. In Africa, the people have sacrificed so much and they continue to seek for themselves. Sovereign states throughout the world and in particular African nations are claiming to be seeking emergence when it’s simply a choice!!
Dr. Mehenou Amouzou obtained his Master in Business at the European Advanced Institute of Management and a Certificate in Finance and Investment in Paris, France. He completed his studies in International Relations and Political and Defense Strategies and obtained his Doctorate of Philosophy in Finance.
Fundacion Paraiso Sin Fronteras; Nkrumah Amouzou Production; Morgan Lewis; Loic Mbaiagom Dingamyo & Kokou Paul Amouzou.